European stock indices and futures for US indices on Tuesday are slightly rising, while the British pound is losing ground slightly, but in general investors have abstracted from the news about the explosion in the UK.
As a result of the explosion at the concert of Ariana Grande in Manchester on Monday evening killed at least 22 people. The police are considering the version of the terrorist attack. Recently, such attacks in Western countries usually had a limited impact on financial markets.
The pound dropped to the euro by 0.3%, and to the dollar – by 0.1%. Meanwhile, traditional asylum assets, including yen and government bonds, first increased, but during the morning part of trading lost almost the entire increase.
“It’s a tragedy,” says Mike Bell, an analyst at J.P. Morgan Asset Management on international markets, but “the markets do not focus on it.”
European index Stoxx Europe 600 during the morning part of the market rose by 0.3% due to the growth of shares of technology companies, banks and automakers. Trades in the Asian stock markets have passed with a heterogeneous dynamics.
Futures on the S & P 500 show that the index will start the session with an increase of 0.2%. On Monday, the US index closed with the growth of the third consecutive session with the support of shares of technological and industrial companies.
US stock markets recovered after a sharp fall in the middle of last week, which arose because of concerns that political conflicts in Washington could hamper the implementation of President Donald Trump’s program. According to some analysts, in recent sessions these fears have softened due to strong corporate results and high fundamental economic indicators.
“Reflationary trade is undergoing changes, but it is not over.” Yes, there are some political difficulties, but the fundamental corporate indicators remain quite strong, “said Jean Medesin, member of the Carmignac investment committee.
“In such conditions, we recommend buying at any kickbacks,” he added.
In Europe, the growth of shares of technology companies compensates for the fall in securities of mining companies and companies related to real estate, following yesterday’s increase in securities of the American technology sector.
Support for markets on Tuesday and have new signs of recovery in the European economy. According to IHS Markit, the economy of the euro area grew at a maximum rate in the last six years.
The British FTSE 100 climbed 0.2%. He usually benefits from a weakening of the pound, as many companies in the index earn a significant portion of the proceeds abroad.
On Asian stock exchanges, the decline was predominant. The biggest drop was seen in China, where investors are concerned about the volume of new listings – about 10 companies spend an IPO per week.
The Chinese Shanghai Composite dropped 0.5%, while the Shenzhen Composite Index fell 2.1%.
The Japanese Nikkei Stock Average lost 0.3%, while the Australian S & P / ASX 200 lost 0.2%. South Korean Kospi resisted the general trend and gained 0.3%.
Oil prices are slightly lower after rising to a maximum for the month in the previous session. The barrel of Brent oil fell by 0.8% to 53.45 dollars. Investors are waiting for a meeting of OPEC members, which will be held on Thursday and at which, it is expected, the participants will agree on the extension, and possibly tightening of the production restrictions.
The yield of Greek government bonds on Tuesday increased, after the day before the country failed to agree with creditors on easing the debt burden.
The yield of 10-year US government bonds, according to Tradeweb, fell to 2.242% from 2.254% on Monday. Investors are waiting for the release on Wednesday of the minutes of the May meeting of the Fed. Some believe that the central bank in June will keep interest rates at the same level due to the recent weakening of the dollar and lower yields of government bonds. Others believe that the Fed will not change course and raise rates.
“We believe that they will raise rates in June, there is no reason to postpone – the economy looks stable,” comments
Bell, who hopes to increase bond yields in the coming months.
Investors in bonds are expected to respond to US macro data, including the primary home sales for April, which will be released later today, as well as data on orders for durable goods and revised GDP for the first quarter, to be published in Friday.